Veterans Business Program Takes a Hit

Thousands of veteran-owned businesses are being denied opportunities to bid on government construction projects, despite a Department of Veterans Affairs program aimed at giving preference to retired or disabled veteran business owners.

According to a report today in Des Moines Register, new guidelines aimed at preventing fraud in the bidding process has cut the number of companies eligible to bid on projects from 18,000 in 2010 to about 6,250 today. As a result, the cost of projects has risen.

“Throughout the country this is costing taxpayers millions of dollars,” Terry Winn, owner of an Omaha-based business that frequently works on government projects in Iowa, told the Register. “It is red tape, and it’s very burdensome.”

The problem, the Register reported, stems from a Government Accountability Office investigation a few years back that cited thousands of fraud cases involving non-veteran businesses that had won millions in government construction contracts.

As a result, Congress passed a law making changes to the bidding process and giving veterans department officials greater authority to conduct background checks. The new process has created more bureaucratic obstacles for veteran businesses to cope with, leaving some unable to provide the time and paperwork necessary to qualify.

For example, Winn, a Navy veteran, told the Register he was unable to compete for veterans projects for some three months because of paperwork demands. He was forced to drop several bids worth millions of dollars during that time.

Retired Army veteran Alan Sprinkle, who owns a construction company in Waukee, Iowa, also told the Register that the new background checks required him to submit 125 documents to federal officials.

He was able to get certified for the bidding process with the help of Republican Rep. Tom Latham, but in the meantime his bids on two Iowa veterans hospital projects were rejected and given to out-of-state contractors. Sprinkle's bids on both were the lowest and could have saved taxpayers $900,000, the newspaper reported.

Thousands of veteran-owned businesses are being denied opportunities to bid on government construction projects, despite a Department of Veterans Affairs program aimed at giving preference to retired or disabled veteran business owners.